Coun. Evan Woolley is touting an aggressive solution to the painful tax shift that has hammered businesses outside of the downtown — though not all of his colleagues are embracing the plan to slash city budgets and divert funds from four recently approved major capital projects.

Woolley proposed to alleviate the current tax burden on businesses by redistributing some of the weight onto homeowners through a seven per cent hike in property taxes in 2019, according to a notice of motion going to council on Monday.

The hike in property taxes would be offset through a $125-million rebate program — which Woolley hopes to fund through a $100-million cut to city budgets over the next nine months and by taking funds away from council’s newly created capital reserve set aside for a new arena, field house and expansions of the BMO Centre and Arts Commons.

The Beltline councillor characterized his proposal as sharing the pain equally between the city budget, residents and businesses.

“We’ve asked the business community to bear the brunt of this tax burden over the last number of years. This year, I think it’s unsustainable for us to ask them to do that again,” Woolley said.

“We have to do more, we have to dig deeper and we have to tighten our belts more and that won’t be without consequences, but I think as a part of this significant lost revenue, we have to share that equally.”

A seven per cent hike in property taxes would result in a $132 increase to the average home’s tax bill in 2019. However, Woolley’s proposed rebate program would see a majority of that increase refunded: resulting in just a $32 increase in taxes.

Woolley’s proposal comes as the city continues to grapple with a significant hole punched in municipal finances as a result of plunging downtown property values caused by the economic downturn.

More than $250 million in lost property taxes from downtown office towers must now be made up annually from non-residential properties outside the core, including industrial areas and the suburbs.

More than $250 million in lost property taxes downtown must now be recovered from non-residential properties outside Calgary’s core.

Council is expected to vote on potential solutions to this tax shift problem, including Woolley’s, at the March 18 council meeting, though some council members have said that a final decision likely won’t come until April.

Some of Woolley’s colleagues are irritated the Ward 8 councillor opted to float his proposal publicly before council met to discuss options next Monday.

Others are questioning how he hopes to achieve a $100 million cut to the city’s 2019 budget three months into the calendar year. Previously, city bureaucrats had proposed a much smaller cut, $60 million over three years, to offset tax hikes.

“We’ve cut $600 million already,” said Coun. Ward Sutherland. “To suddenly come up with a substantially more amount, what we’re doing is just taking money away from investments and I’m not sure that’s a smart thing to do.”

Coun. Jyoti Gondek said she’s in favour of shifting more tax burden onto homeowners, having floated a similar idea at a meeting of council last week. Though she said she’s concerned that slashing city budgets by $100 million could mean job cuts.

Ward 3 Councillor Jyoti Gondek.Gavin Young /
Postmedia

“This four-year budget period that we are locked into, it is going to be difficult to find savings,” Gondek said. “We’re trying to keep businesses from going (under) and keep people from losing their jobs, but now we’re saying, ‘yeah, but let’s do that to City of Calgary employees, let’s not worry about them’ — we’ve gotta strike a balance.”

At a press conference Thursday, Woolley acknowledged the proposed cut could be painful: “This will not be an insignificant decision. This will have an impact,” he said. “When we are looking at any budget reductions, we always start with the principle of least harm.”

A majority of council members agree that some of the tax burden must be shifted onto homeowners. The move is largely seen as potentially unpopular but a necessary correction to Calgary’s longstanding practice of loading a disproportionate share of the tax burden onto businesses.

Where council continues to disagree is how much of the tax burden to shift, how quickly it should be shifted and how to soften the blow.

The entire debate has been music to the ears of some in Calgary’s business community.

“We are starting to see councillors, and council in general, understand the severity of the problem,” said Mark Cooper, with the Calgary Chamber of Commerce.

“In particular, (they’re) looking for solutions that find a more equitable balance between the non-residential and residential rate. We certainly think it’s a step in the right direction.”

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